The #1 cheapest state to live in is Mississippi. This Southern state consistently ranks as the most affordable place to reside in the United States, offering a significantly lower cost of living compared to the national average.
Top Cheapest States to Live
When evaluating the most affordable states, various factors such as housing, utilities, groceries, transportation, and healthcare are taken into account. States with a lower overall index score indicate greater affordability.
Here's a look at some of the most budget-friendly states:
| Rank | State | Index Score |
|---|---|---|
| 1 | Mississippi | 85.3 |
| 2 | Oklahoma | 86 |
| 3 | Kansas | 87.7 |
| 4 | Missouri | 88.4 |
Note: An index score below 100 indicates a cost of living lower than the national average.
Understanding Affordability and Cost of Living
The cost of living in a state is determined by compiling average prices for essential goods and services. A lower index score means that residents can expect to spend less on their daily expenses, making their income stretch further.
Key components influencing a state's cost of living index often include:
- Housing: This is typically the largest factor, encompassing rent or mortgage payments, property taxes, and insurance. States with lower median home prices and rental costs tend to be more affordable overall.
- Utilities: The cost of electricity, natural gas, water, and internet services.
- Groceries: The average price of food items purchased for home consumption.
- Transportation: Expenses related to commuting, including gasoline prices, public transit fares, and vehicle maintenance.
- Healthcare: The cost of medical services, insurance premiums, and prescription drugs.
Living in a state with a low cost of living like Mississippi can lead to substantial savings, allowing residents to allocate more of their budget towards savings, investments, or leisure activities. It also often means a lower income is needed to maintain a comfortable standard of living.
